Justia White Collar Crime Opinion Summaries

The Penal Code authorizes but does not require, county sheriffs to issue licenses to carry concealed weapons. The Santa Clara County Sheriff’s Office rarely issued CCW licenses; the office would not even process a CCW application absent a special instruction Sung, who apparently ran Sheriff Smith’s 2018 re-election campaign and subsequently became the undersheriff, could issue such instructions and could place applications on hold even after licenses were signed by the sheriff. Sung abused that authority to extract favors.Apple executives, concerned about serious threats, met with Sung, who asked whether they would support Sheriff Smith’s re-election. Apple would not give anything of value in exchange for CCW licenses but two executives personally donated $1,000, the maximum allowable amount, to Smith’s campaign. After the election, the applicants were fingerprinted and completed their firearm range qualification tests. Sheriff Smith signed the CCW licenses but they were not handed over. Although Apple had no program for donating products to law enforcement agencies, after a meeting with Sung, an Apple executive (Moyer) emailed an inquiry about donating iPads or computers to the sheriff’s office's “new training facility,” not mentioning Apple’s pending CCW applications. The Office was not setting up a new training center but asked for 200 iPads, worth $50,0000-$80,000. Apple’s team then received their CCW licenses, Apple terminated the promised donation.The court of appeal reversed the dismissal of a bribery charge against Moyer. A public official may be bribed with a promise to donate to the official’s office. View "People v. Moyer" on Justia Law

After defendants Frayba and William Tipton pled guilty to committing insurance fraud, they were ordered to pay victim restitution to Nationwide Insurance Company of America (Nationwide). Later, Nationwide petitioned the trial court to convert the criminal restitution orders to civil judgments against both defendants. Defendants opposed. Relying on Penal Code1 section 1214, the trial court granted Nationwide’s petition and entered civil judgments against the defendants. On appeal, defendants argued the trial court erred because (1) Nationwide “failed to provide citation to any . . . authority supporting” conversion of the victim restitution orders to civil judgment; and (2) Nationwide’s petition lacked supporting evidence. The Court of Appeal found no reversible error and affirmed the trial court's judgment. View "Nationwide Ins. Co. of Am. v. Tipton" on Justia Law

Ung stole cryptocurrencies from multiple victims in 2018, exploiting a common website security feature: A user can prompt a website hosting an account to send a text message to the user’s phone with a security code that temporarily allows access to the account. Ung employed “SIM swapping” in which the thief tricks the victim’s phone carrier into switching the victim’s phone number to a SIM card in the thief’s phone. The thief then prompts the website hosting the victim’s financial account to send a temporary security code to the hijacked phone; the thief accesses the account and transfers the assets.In 2021, Ung pleaded no contest to identity theft, attempted grand theft, and 10 counts of felony grand theft. He admitted a white-collar crime enhancement; he committed three offenses after his bail was revoked. The court imposed a 10-year prison term, entered a general restitution order, and later ordered Ung to make restitution by transferring cryptocurrencies to the victims in the same kinds and amounts he had stolen. Ung argued the order violated his due process rights to notice. He estimates the value of the cryptocurrencies was about $1.56 million when he stole them; the value was about $15.9 million by the time of the restitution hearing.The court of appeal affirmed. Under the statute, the value of stolen property is the replacement cost of like property. By stealing the victims’ cryptocurrency, Ung deprived them of the ability to sell it for a profit after its value increased; whatever profits they lost were a direct consequence of Ung’s conduct. View "People v. Ung" on Justia Law

This case arose out of a qui tam action against Prime Healthcare Services—Encino Hospital, LLC (Encino Hospital) and others to impose civil penalties for violation of the Insurance Fraud Prevention Act (IFPA), Insurance Code section 1871 et seq. The State of California and relator (Plaintiffs) appealed from a judgment entered after a bench trial in which the court found insufficient evidence to support their allegations that Defendants engaged in insurance fraud by billing insurers for services performed in a detox center for which they had no appropriate license, and by employing a referral agency to steer patients to the center.   The Second Appellate District affirmed the judgment. The court explained that, CDI alleged that Encino Hospital misrepresented to insurers that it was properly licensed to provide detox services when it was not. The trial court found no evidence suggesting that Defendants presented a false claim to any insurer. The court agreed, reasoning that no authority of which it is aware or to which it has been directed obligates Encino Hospital to hold any license other than its license as a general acute care hospital. Because Encino Hospital needed no separate license or approval, and no evidence showed it concealed any provider, the CDI’s cause of action for false claims failed for lack of a predicate. View "State of Cal. v. Encino Hospital Medical Center" on Justia Law

Defendant Laura Shelly pled no contest to one count of embezzlement by an employee. Pursuant to the negotiated plea, the trial court imposed a five-year term of felony probation. The court also ordered defendant to pay $72,972.47 in restitution. Shelly argued on appeal the length of her probation had to be reduced in light of Assembly Bill No. 1950 (2019-2020 Reg. Sess.) which reduced the maximum length of felony probation to two or three years. She also argued the amount of restitution had to be reduced by $5,816.25. The Court of Appeal agreed, and the State conceded, that Assembly Bill 1950 applied retroactively and entitled defendant to have the length of her probation reduced. The question remaining was whether the State was then entitled to withdraw from the plea agreement. To this, the Court held it was not. The Court also reduced the restitution order by $1,000. View "California v. Shelly" on Justia Law

Sara, an elderly woman, owned the property and resided there with her husband, who has dementia. San Mateo County informed Sara that she owed taxes and faced foreclosure. Miller, a real estate salesperson, contacted Sara and offered to secure a reverse mortgage to pay Sara’s tax obligation. Miller provided Sara with a document to sign. Sara believed the document was to secure a $500,000 reverse mortgage and that after she signed, Miller would pay the taxes. Sara did not read the document but signed it. The document was actually a purchase agreement. A deed transferring the property to Rex was recorded the same day. The District Attorney’s Office notified Sara of the sale. Lion had purchased the property from Rex. Miller pled no contest to unlawfully and knowingly procuring and offering a false or forged instrument to be filed in a state public office and grand theft of the property. Lion filed a quiet title action.The state moved to void the deed to Rex. The court determined the deed was forged and that the matter was appropriately addressed in the criminal proceeding. The court of appeal affirmed the adjudication of the deed as void from its inception, rejecting arguments that Miller’s no contest plea “was not an adjudication of the alleged falsity or forgery” of the deed, that the finding was not supported by the record, and the court should have deferred to the pending quiet title action. View "People v. Miller" on Justia Law

In July 2016, Reagan was killed while he was operating Czirban’s bulldozer in aid of the California Department of Forestry and Fire Protection at a Monterey County wildfire. An investigation revealed that Czirban did not have workers’ compensation insurance. The trial court convicted Czirban of procuring or offering a false or forged instrument, tax evasion, failure to collect, account for, or pay taxes, and misdemeanor failure to secure payment of workers’ compensation insurance. The court suspended the imposition of sentence, placed Czirban on felony probation for three years, and reserved the issue of restitution. Czirban appealed the conviction. While that appeal was pending, the court ordered Czirban to pay, as a condition of his probation, victim restitution of $70,667.56 to Reagan’s partner, Morgan, the mother of their two children (Pen. Code 1237(b)).The court of appeal affirmed in part, rejecting Czirban’s arguments that the trial court improperly awarded restitution for attorney fees because the award rests on a violation of the Workers’ Compensation Act related to a survivors’ benefit paid to Morgan by the state and that the restitution award is invalid as a probation condition because the attorney fees lacked a rational nexus to his misconduct, were excessive, and were unreasonably calculated. The court reversed the award of $22,485.13 in interest as calculated from the wrong date. View "People v. Czirban" on Justia Law

National Western Life Insurance Company (NWL) appealed after it was held liable for negligence and elder abuse arising from an NWL annuity sold to Barney Williams by Victor Pantaleoni. In 2016, Williams contacted Pantaleoni to revise a living trust after the death of Williams’ wife, but Pantaleoni sold him a $100,000 NWL annuity. When Williams returned the annuity to NWL during a 30-day “free look” period, Pantaleoni wrote a letter over Williams’ signature for NWL to reissue a new annuity. In 2017, when Williams cancelled the second annuity, NWL charged a $14,949.91 surrender penalty. The jury awarded Williams damages against NWL, including punitive damages totaling almost $3 million. In the Court of Appeal's prior opinion reversing the judgment, the Court concluded Pantaleoni was an independent agent who sold annuities for multiple insurance companies and had no authority to bind NWL. The Court determined that Pantaleoni was an agent for Williams, not NWL. The California Supreme Court vacated that decision and remanded, asking the appeals court to reconsider its finding that Pantaleoni did not have an agency relationship with National Western Life Insurance Company in light of Insurance Code sections 32, 101, 1662, 1704 and 1704.5 and O’Riordan v. Federal Kemper Life Assurance Company, 36 Cal.4th 281, 288 (2005). Upon remand, the Court of Appeal affirmed the judgment finding NWL liable for negligence and financial elder abuse. However, punitive damages assessed against NWL were reversed. The Court found no abuse of discretion in the trial court’s calculation of the attorney fee award, but remanded the case for the court to reconsider the award in light of the reversal of punitive damages. View "Williams v. Nat. W. Life Ins. Co." on Justia Law

Following a preliminary hearing, petitioner Dr. Sanjoy Banerjee was charged in an information with two counts of presenting a false or fraudulent health care claim to an insurer (a form of insurance fraud, counts 1-2), and three counts of perjury (counts 3-5). The superior court denied Banerjee’s motion to dismiss the information as unsupported by reasonable or probable cause. Banerjee petitioned for a writ of prohibition to direct the superior court to vacate its order denying his Penal Code section 995 motion and to issue an order setting aside the information. The Court of Appeal issued an order to show cause and an order staying further proceedings on the information, pending the Court's resolution of the merits of Banerjee’s petition. The State filed a return, and Banerjee filed a traverse. The State argued the evidence supported a strong suspicion that Banerjee committed two counts of insurance fraud and three counts of perjury, based on his violations of Labor Code section 139.3(a) between 2014 and 2016. During that period, Banerjee billed a workers’ compensation insurer for services he rendered to patients through his professional corporation and through two other legal entities he owned and controlled. The insurance fraud charges are based on Banerjee’s 2014-2016 billings to the insurer through the two other entities. The perjury charges were based on three instances in which Banerjee signed doctor’s reports, certifying under penalty of perjury that he had not violated “section 139.3.” Banerjee argued: (1) the evidence showed he did not violate the statute's referral prohibition; (2) even if he did not comply with section 139.3(e), the “physician’s office” exception to the referral prohibition applied to all of his referrals to his two other legal entities; and (3) the patient disclosure requirement of section 139.3(e), the referral prohibition of section 139.3(a), and the physician’s office exception to the referral prohibition were unconstitutionally vague. The Court of Appeal concluded: (1) Banerjee did not violate section 139.3(a) by referring his patients to his two other legal entities; and (2) the evidence supported a strong suspicion that Banerjee specifically intended to present false and fraudulent claims for health care benefits, in violation of Penal Code section 550(a)(6), by billing the workers’ compensation insurer substantially higher amounts through his two other legal entities than he previously and customarily billed the insurer for the same services he formerly rendered through his professional corporation and his former group practice. Thus, the Court granted the writ as to the perjury charges but denied it as to the insurance fraud charges. View "Banerjee v. Super. Ct." on Justia Law

Dawson, the City Manager of Del Rey Oaks, purchased the Portola lot, “the last vacant lot” in the City. It had a water meter but no water credits and could not be built upon without water credits. The prior owner had never been able to obtain water rights or water credits. The City lacked any water credits and had no surplus water. In 2015, the City leased the Rosita property, part of Work Memorial Park, to Mori for a garden center. Dawson contracted on behalf of the City for a new well on the Rosita property and arranged for the water credit from the Rosita property to be transferred to Dawson’s Portola lot. Dawson never reported his ownership of the Portola lot on his Form 700 disclosure.Dawson was convicted of a felony count of violating Government Code section 10901 (conflict of interest as to a contract entered into in his official capacity) and a misdemeanor count of violating section 91000 (failing to report an interest in real property under the Political Reform Act). The court granted him probation. The court of appeal affirmed. The prosecution was not required to prove the inapplicability of an exception to section 1090 “for remote or minimal interests” because it was an affirmative defense; Dawson bore the burden of raising a reasonable doubt. View "People v. Dawson" on Justia Law